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Auckland Apartment Report – June 2023

By Daniel Horrobin

Goodbye to OCR increases?

As many predicted, the Reserve Bank of New Zealand has signalled that it is now done raising the official cash rate, following late May’s 0.25 percentage lift to 5.5%. The RBNZ doesn’t expect to start cutting the rate until late-2024 and according to economic commentator Tony Alexander there is a reasonable chance it will start before that – maybe early next year.

Director of City Realty Group, Daniel Horrobin, says: “With a general election to navigate later this year it would appear unlikely there will be any significant movement before then.” 

May saw the number of properties for sale in the CBD tighten, with healthy rents no doubt a persuasive factor in owners’ decisions to retain them rather than put them on the market. Sales activity for the month of May in Auckland Central was a direct reflection of the tight stock availability.

“As we know, our CBD market ignores traditional residential seasonal influences and is more reflective of economic and financial conditions prevailing at any given time,” says Daniel.

Auction activity for May in Ray White’s Central City office remained steady with sellers for the most part willing to negotiate in order to secure a sale on the day.

The big news for the apartment sector this past month has been new disclosure requirements introduced on May 9 following a major overhaul of the Unit Titles Act. The amendments impose significant additional responsibilities on body corporates and owners on the amount of information that MUST be provided to buyers of Unit Title properties ( prior to entering into a sale agreement.

These requirements were well-signalled before the implementation date of May 9, with no transitional period granted. However, a number of body corporates appear to have been caught scrambling to deliver the necessary documentation. As we head into June there is still some settling in to do around these requirements but we are hopefully over the honeymoon blues, says Daniel.

On the rental scene, rents continue to hold steady at very healthy levels for owners. As a result, conditions are extremely disheartening for those searching for accommodation. We have reports of 30 to 40 attendees at viewings for rental properties which is virtually underheard of in our central city market. A prime driver of demand for rental property is the annual net migration gain at an all-time high at 65,400 for the year ending March 2023, with the net gain in March alone being 12,100. It would be fair to say a large proportion of these people target our largest city.

As the winter months loom, it’s business as usual for Ray White’s licensed agents who are well equipped to help both sellers and buyers on their property journey, being well-briefed on market dynamics and the intricacies our city apartment market presents.

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